| Strong group support and experienced management:
Om Hydropower Limited benefits from the continued support of its promoter group, which has demonstrated commitment to the project through timely support during periods of hydrology-related volatility and regulatory uncertainty, including the ongoing tariff redetermination process. The promoter group has presence in the hydropower sector through group entities operating in the same line of business, providing valuable technical, operational and regulatory experience that supports efficient project operations. The company is guided by an experienced management team with domain expertise in hydropower project execution, operations and regulatory affairs, which has enabled smooth coordination with statutory authorities and ensured operational continuity, thereby supporting the overall business profile of the company. Acuité notes that the experienced promoter group with hydropower industry presence and demonstrated support, along with an experienced management team, continues to provide stability to Om Hydropower Limited’s operations
Assured offtake under long-term PPA:
OHL has a long-term Power Purchase Agreement (PPA) with Himachal Pradesh Electricity Board (HPSEBL) for a tenor of 40 years starting from 2013, which provides visibility with respect to power evacuation and limits volume-related offtake risk. The PPA provides for the sale of entire installed capacity of 15 MW to HPEB, resulting in complete capacity tie-up. Power is contracted at a tariff of Rs.2.25 per unit, with the tariff revision matter currently pending before Appellate Tribunal for Electricity (APTEL), which introduces uncertainty in realizable tariff levels. The offtake arrangement continues to remain in force with HPEB, a state-owned electricity utility. The PPA provides for a billing and receivable cycle of around 30 days. Overall, the long-term PPA with full capacity tie-up supports offtake visibility, while cash flow realizations remain subject to the outcome of the tariff proceedings.
Improvement in operating performance with recovery in generation levels:
The operational performance of OHL witnessed moderation during FY2025, with the average plant load factor (PLF) declining to 31.55 percent from 40.05 percent in FY2024, primarily due to weak hydrological conditions and lower water inflows, which adversely affected generation. In FY2025, OHL registered revenue of Rs.8.02 Cr. against Rs.10.19 Cr. in FY2024. However, operations have shown a strong recovery during 11MFY2026, with the average PLF improving to 42.02 percent, supported by normalized rainfall, improved reservoir levels, and better water availability, enabling higher generation. The strong recovery in generation has resulted in higher income during the 11MFY2026, where the company has registered revenue of Rs.11.72 Cr, compared to Rs.7.03 Cr. registered during 11MFY2025.
Maintenance of TRA account and DSRA:
OHL derives strength from the maintenance of the Trust and Retention Account (TRA) mechanism, where in all the project's receivables are directly routed through the TRA, ensuring ring-fencing of cash flows and priority servicing of debt obligations. Further, the company has created upfront funded Debt Service Reserve Account (DSRA) of Rs.3.60 Cr. in the form of fixed deposits, providing an additional liquidity buffer against cash flow volatility inherent in hydropower operations. Acuité believes that the company’s adherence to these stipulations ensures timely debt servicing.
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| Moderate financial risk profile:
OHL’s financial risk profile is marked by moderate net worth, moderate gearing and debt protection metrics. The networth stood at Rs.17.63 Cr. as on March 31, 2025 declined from Rs.23.23 Cr. as on March 31, 2024, due to net loss suffered during the year. The total debt position (comprising only long-term debt and current maturities of long-term debt) stood at Rs.48.16 Cr. as on March 31, 2025. The gearing level deteriorated to 2.73 times as on March 31, 2025 from 2.13 times as on March 31, 2024 due to decline in networth. The debt protection metrics, particularly the average debt service coverage ratio (DSCR) throughout the tenure of debt stood at ~1.73 times. Acuite believes, the financial risk profile of the company will improve over the medium term considering the expected increase in tariff and profitability.
Hydrology risk inherent with run-of-the river projects:
Om Hydropower Limited’s operations are exposed to hydrology risk, which is inherent in run-of-the-river (RoR) hydropower projects, as power generation is directly dependent on river flows and rainfall patterns. Variations in monsoon intensity, seasonal rainfall distribution, and water availability can lead to volatility in generation levels and plant load factor, as observed during periods of weak hydrological conditions. Unlike storage-based projects, RoR plants have limited ability to regulate water discharge, restricting operational flexibility during lean flow periods. Consequently, adverse hydrology can impact electricity generation, revenues, and cash flows, making operating performance sensitive to climatic conditions and rainfall variability. However, the hydrology risk is partly mitigated by the project's location on the perennial river system with established long-term hydrological patterns, which provides reasonable visibility on average generation over the cycle. Further, the company benefits from the assured power offtake under long-term PPA with HPSEBL, which support cash flow stability during normal hydrological conditions.
Tariff revision delays and associated regulatory risk:
Om Hydropower Limited is exposed to regulatory risk arising from delays in tariff revision and final tariff determination, which is inherent to regulated power projects. Tariff orders are subject to review and approval by the regulator based on prudence checks on project cost and allowable returns, which may be time-consuming and involve appellate proceedings. Presently, the regulator has approved a tariff of Rs.2.78 per unit, against which the company has filed an appeal seeking a tariff of Rs.3.84 per unit and the matter is currently under final hearings before the Appellate Tribunal for Electricity (APTEL). In the interim period, generation continues to be billed at interim tariff of Rs.2.78 per unit, leading to the accumulation of differential receivables and temporary pressure on liquidity. Any further delay or adverse outcome in tariff finalisation could impact cash flow visibility, although recoverability of such dues is generally expected post regulatory resolution.
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